brought in 86 million in ticket sales. thanks to our guest hosts, governor ed rendell. thank you. >> happy veteran's day, everyone. remember it. right now, it's time for ""squawk" on the street." [ music playing ] good monday monk. welcome to ""squawk" on the street." i'm here with jim cramer, david faber of the new york stock exchange. it is veteran's day. with that, stocks are opened. although the bond market is closed. the nyse will honor the nations veterans before the opening bell. we extend our thanks, as well. oil is one to watch as talks

between the u.s. and iran fail over nuclear weapons. overall, a busy week over earnings and yellen's confirmation hearings later in the week. the markets potentially taking a breather after the dow hit a new high friday, both it and the s&p closed down a fifth consecutive week of gains. volatile after iran's nuclear program stumbled. amazon strikes deal with the u.s. postal service to deliver some packages on sunday, while the chinese rival ali baba wraps up $3 billion in one day. transocean has a proxy battle. we'll talk about that. we begin with the dow coming off another record high t. blue chips up 4.5%, marking five consecutive weengs of gains. following one of the papers today, the front of the "journal" arguing the retail investor is somehow back. stocks regain broad appeal, mom and pop, are they finding the

markets again? >> my favorite subhead on that is, if you go on the web, you will see, it's bad. i love it. it says, they used cause for concern in the newspaper version, but in the online version, it says, it's bad. bad for who? bad for the bears? bad for the bulls? bad for the country. i don't know if it's bad. if you look at the ratio, one-sixth of the money that's come back out has come back in. they mentioned the pes in that article, 14-and-a-half, that's kind of regular. all this talk reminds me the people that are really negative, the people that come on air, the professionals, they're worried about taper. they're worried about sequester, they all have something to worry about. people at home are saying, maybe this is an opportunity. kind of a split. >> interesting split, yeah. >> a split. >> well, we do have a big call today out of morgan stanley, downgrading the internet space. it covers the netflixs and the yelps and the pricelines and the opens, bringing it all inline,

taking google off the best ideas list. >> this is definitely cold water. it was a slap in the face for a group that has been hot. it remind me once again, you get something that is hot the analysts will pull back. the analysts have been prudent the whole way up. they not best buy the dow was starting to upgrade. i do not think it's the time to leave the internet group. i think it was the time to recognize that twitter went too high. twitter is now doing exactly what it should in a rational market, comes back down. >> that i think again is a sign that things are okay. >> you know, it's funny, when you talk about this models of these giants, now i'll take out, let's take out the fundamental am equation as to whether their price right now is the right one in which to buy or sell. at google, i can't tell you how many times i have been talking to different ceos. google comes up as a powerhouse, a force to be reckoned with as the century unfolds. same with amazon and onlyson web services as well.

so we talk often about what you should be buying it here or what the pe is or the growth rate is or how the quarter was, but the bigger picture for these kind of companies would seem to be extraordinarily strong. >> i totally agree, if google is a $650 billion ad market. they're scratching the surface of that. aol talked about this last week. this problematic feature, basically, allowing you to carpet bomb all websites if you go to goggle for it. they've got a good strategy. the stock sells slightly more than clock rocks. i like it. back up, the cash sells for less. so, you know, this is that kind of foe exuberance i keep hearing about, if people put it to pen and pencil, amazon is unto itself. >> it lives in its own universe and it creates that universe, it keeps getting bigger and bigger. >> we will talk about it in a second. on a macro-level, gdp looked

good last week. isms looked good. jobs on friday looked pretty good. the dow at a record high looks pretty good. >> good news was good news. i know people expected when the bonds got cracked. okay on friday. the bond market on that mistake. >> that people expected everything to go down. they didn't expect 17% of the s&p, which is the financials, went nuts to the upside. we saw moves in the financials that basically wiped out a whole quarter of under performance as people said, you know what, this yield curve is they will take the deposit and make you a lot of money. i was looking at the cd rates, wondering, where does all this money come on the market? in the funds, you are getting .8. you can imagine how much money these banks make. >> meanwhile, when you talk to the big banks, they have balances that are higher than they have been at consumer deposits. broadly speaking, the average balance is 400 bucks.

leverage has come down, credit quality has gone up. >> they sell, david, at a very high price to prosecution. >> yes. they do. >> so when you look at the ones with a high prosecutions, they have a big discount. take a look at the ohio banks, they're beginning, the tennessee banks, they're beginning to get a higher multiple versus the prosecutorial banks. that's kind of ripe because the fines, i'm actually not for once i'm not being facetious with you. >> i was going to say. is there a mo tel avtif? >> no matter who they talk to, they settle. there is always a new entity. they are set up in entity. it's like the you know the new deal, it's like the bank reclamation agency. all the government does is reclaim whatever they can from all the banks. right now, they are dealing with so many different agencies, it's like, wow, i thought they had nailed that one close. those banks sell to discount.

>> we mentioned amazon, let's get to some of the fuse from it this morning. amazon.com struck a deal with the u.s. postal service to deliver packages on sundays. the services will be available to amazon prime members. only to new york and los angeles at first. in the meantime, a new record for the biggest shopping day for the year. singles day, alibaba says half a day is in. sales on shipping sites have surpassed 3.1 billion. that's half a day. be i the way, that's what they did last year as well. so that's a record for the entire day on november 11th. it only took them about a half a day. maybe they got a 5 billion or who knows, $6 being at alibaba. this started in '09. t-mall, they started this idea that on 11-11, go out and shop. we'll give you a lot of discounts how about their broader platform, 53% of all the packages sent in the country are a result of a purchase on there.

but they in '09, they started this. itself it's grown every year. by now it is the largest single shopping day in the world. in the world. >> i was following the action this morning early, the chinese, they have become shoppers. this is again you hear about this great middle classification of china. it's happening very rapidly. this is just yahoo, right? am i overthinking it? >> no, you are not. 22% fully diluted. 24%. fully diluted stake in alibab's 22%. we don't know where they will go in public. if they would still prefer hong kong from everything i hear. that remains unclear to whether they can get that done. but this is a power house, we like to compare it to amazon, ebay, pay pam. it's not quite a clear comparison, the talbot part of it is millions of small businesses, advertise, that's where the money comes.

then you got t-mall, which is the brand name site in a way. >> you still don't have that concentration of smartphones. what happens when they keep rolling out smartphones there. as mickey dressler says, basically a store on your cell phone. what happens then? the chinese are incredible. they are like, they can save the world when it comes to spending. >> you are right, mobile is becoming a much more important part of this as you might imagine. but as you said, only 42% of chosen's population uses the internet. >> yes. >> 43% shop a online for the 8% in u.s. to your point about mobile as well. a billion smartphones will be shipped globally. china will account for 350 million of them. mobile becomes more important. >> the receptacle about this singles thing, apparently typers are a gao gigantic seller, wouldn't that be counterbuttive

on si -- counterintuitive on singles day. >> when was the last time you changed a diaper? >> it's been at least 18 years? >> we didn't have diapers back then. >> david and i were doing it last week. >> were you, really? it's been a little while. >> a guy came to my house with a cloth diaper. i gave him the other doingers. >> no. >> diapers. >> we mentioned diapers online, amazon, of course, going to be doing sunday delivery through usps. >> incredible. >> a group that has lost a couple billion dollars and seeing letter volume cut in half in the past decade or so. friday, of course the rollout of alpha house, their new original content series with john goodman, it's going took big week. >> once again, i want to say, where do people have time to do work? they are so busy shopping online, playing games online. they were watching youtube,

they're tweeting, entering facebook. at what point do you get your work done? you are so busy doing these other things. >> you seem to find a way. >> i do it mostly between 3:00 a.m. and 7:00 a.m. once i get to work, i got to tweet and be on facebook and shop like a madman. >> we are familiar with your shopping patterns. did you buy anything nice this weekend? or was it a weekend off for you? >> no, busy working on my restaurant. >> there you go. there you go. you got that to look forward to? >> eight hours in my restaurant. >> in the meantime, one story, very difficult to talk about. the philipines in need of supplies and aid in wake of the devastating typhoon that may have killed as many as 10,000 cnbc is in manila with the latest on that. good morning. >> reporter: good morning to you. it's even here, it starts at 10:00t. in the last few hours, what we learned is that the president declared a national state of

calamity after this super tiempb haiyan that ripped through the eastern and the central provinces on friday. we really are counting the costs right now. what this state of calamity means on a national intafs effectively the government in manila will take charge of the overall relief. it cuts out a layer and expedite and speed up the pro says which is -- process which is needed t. government can now control prices. so that means that the inflationary impact, i suppose, can be mitigated to a certain degree. and the bank dock, the central bank has made it clear, there is likely to be a one offer inflation hit. there will be a hit on the economy. we are looking at about $14

billion u.s. in terms of the economic costs at this stage, but it's clear that the filmily pines has been quite resilient. it has suffered these earthquakes and natural disasters and typhoons before. not at this magnitude. remember the storm surge was a big tsunami-like factor. so that is a very important factor to bear in mind when are you counting the cost here of the real damage at ground zero. but a lot of economists have been telling us they'll probably meet their 7% growth target. what's interesting is that the philipines has been outside china, one of the more resilient success stories economically in this region. so an economic cost. it will be absorbed. it will be managable. there will be a one-up hit to inflation. again, that will be managable, too. what is difficult to estimate and what you cannot get away from is the huge and mounting human costs here.

very difficult to say at this stage the exact level of fatalities. many are telling us, it could be in the region of 10,000. back to you, now. >> sri, thanks so much for that. of course, we are keeping a close eye on aid delivery. i think we have early units of marines on the ground. thank you so much. when we come back, we will take the pulse of the consumer with julia stewart the home of applebees and on the heels of that jobs number, a lot mover ""squawk" on the street" from nyse. there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. . .

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>> we had a nice entrance of the branches of the military services on this veteran's day. some representatives of west point will help ring the bell in a moment. of course, it's a day for all of us to thank all of the veterans that have served in this country. the president will lay a wreath. after, he has breakfast with the oldest world war ii vet, 107-years-old, richard overton was a part of the army's 188th. >> that will be an interesting breakfast. then he'll accompany the president to arlington. >> wow. let move on to other news that we have gotten over the course of the morning so far. transocean reaching a deal with carl icahn to resolve a proxy

battle. they will pay out a $3 a share dividend and reduce the number of directors from 11 to 14 and also adds one of mr. icahn's vincent intrieri to the board of directors a. win of a type for mr. icahn here. he began this campaign on january 25th when he filed the 13 d. i think at that point it was 5.6%. i think that more or less stays a donestant, asking for a $4 dividend at that point, asking for the board to be reduced. he hangs in there. he often gets what he wants. here's the latest tweets from mr. icahn talking about his success here with transocean. what is your thought about the sector and the stock, itself. >> this has been one of the poor performers because of the condo, also because their rigs are supposed to be older than other rigs. i have been waiting for the big surge in deep water drilling supposed to happen off the gulf of mexico.

they have not been able to cap it. they have so into harness it. >> that said, it's a very inexpensive stock. so i certainly understood why mr. icahn would want to go for it. it's my least entire part of the entire oil sector. >> really? >> look. i think if you are doing offshore drilling with older platforms, you will not get the contract. there is a big gap between when these big contracts kick in. it's a long-term play. it's not my favorable. my charitable trust sold ensco, you know what, there is better fetch to fry in the sector. but they will pay out that $3 dividend. >> yes. >> versus something, people. ed $4 bucks per share. it puts you in mind of another larger company mr. icahn is asking for significant repurchases of shares. >> yeah. >> i'm not sure that's going anywhere at this point. >> no, they actually the have more products coming occupy samsung like. speaking of apple, i still hold

out the idea that this is about innovation and product. not about financial engineering, but financial engineering has really dominated the thought about apple, which is why the stock is still stuck around the level where carl icahn suggested there would be big things done. >> this has been a year of activism, it's another monday. there are a handful of smaller deals to tell you about. really, when we look back on this year, we focus often activism. >> yes. >> and the enormous money that have flowed into that asset class or certainly at least that part of investing and the influence it's had on so many boards, which only has continued to be, frankly, magnified as we have gone through this year. icahn has been by far the biggest name. >> when you see these articles again about how retails, they're late to the parties at the top. the activists have been the shrewdest group. i think they generate a lot of good returns. they're getting more active. i see this to typify this market as a johnny-come-lately retail

market. when i see people like icahn saying stocks are cheap, we can bring out value. it doesn't joimpblt i don't believe people are late if they come in now. there is value everywhere in this market. >> really. you are saying that on a week where we come up on the anniversary of the november lows. the s&ps have 31%, jim. 31. >> we had no other period where there is, you are absolutely right. i love to stay focused on the fact that it's moved up this year, up 20%. it's never had a downed november/december where you have 24 going into november. behind under the circumstances, alex sikorsky, ceo of johnson & john zo, i know the whispers are a blow. i look at that stock and think there is a premier aaa balance sheet selling this diagnostics unit i think is worth $120. i think alex will bring out $30 of value and to sell j & j now proves nothing to me. proves nothing. >> well, he's going to bring out the opening bell in just a

moment. we will get that in the moment of silence for the veterans here at nyse in just a moment. it's a stationery and gifts store. anything we purchase for the paper cottage .rd .

. >> on this veterans day, about to show a moment of silence. ringing the bell today, the 59th superintendent of the u.s. military academy at west point along with several bell ringers, i believe, who are alum of west point, including as you mentioned before, the bell, jim, before the break. alex sikorsky the chairman and ceo. >> proud captain. >> kenneth hicks, ceo and president of foot locker.

president of helicopter. and the president of oxy, usa from occident am petroleum. >> we had them on friday running a cookoff, seven bar-b-que champions. >> it will be a day of remembrance, of course, across the country. for now, this is a moment of silence in the new york stock exchange. [ moment of silence ] #

[ moment of silence ]

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retail, home builders, a lot of fed speak, yellen with her first chance at the microphone on thursday. lots to watch. >> you should be pauseing on something, right? there should be something that is a stumbling block. on ""squawk"" this morning, there will be a whole new series of budget negotiations coming. december and january, the process has been one month reporting. you got to sell. you got a couple more weeks. >> there is the opening bell. the s&p at the top of your screen, down here, the big board as we said earlier, leiutenant general the superintendent of the academy at west point and west point alumni, commemorating a veteran's day, we will talk to the veteran general in a few moments. criminal justice and members of the veteran's corporate round table. >> darn, it's hard to be a general. my father was, you have no idea how far it is. you work your whole life there they don't make many of them. >> no. >> they take their names out of

the phone book either. >> speaking of generals in the market, we will watch a few big names today, best buy the second biggest gainer of the year on the s&p. i don't know where it has been having it at a neutral. if they take it to a buy today, saying multiple expansion is one thing. now we will see real earnings room. >> i don't want to be too fa facetious about this. the hard goods theory, people want hard goods to get the home values going up. the cycle. >> we don't hear about showrooming anymore. a year ago, we were focused on it. now it's receded into the -- >> they've come under price. when i go to my best buy, it is a joy now. it used to be very difficult. now i find helpful sales people. >> okay, so, jim, the stock is up 265% this year. clearly, it was under priced at the time. there were concerns about its ability to even remain a going concern and, by the way, that was actually out there.

>> right we're completely misplaced. as was the idea you can do an lbo at 15. >> schultz has been selling stocks constantly, why not? >> for here, now? >> not for me, now. i looked at it for a long time. but i think that one of the things that's happened here is, you know, it does have multiple phases. now it will have better sales. it is a better run company. they really upgraded the business. most importantly, this was again the tell-tale sign the analysts were too negative. it's not the individuals who didn't come in, now they're coming in. it's the analysts that said, listen, best buy isn't going to make it. one by one they have to change their stripes. it turns out best buy is the last man standing. >> and they have. i think we should point out when the last one has turned, that's the tide. >> we are not there yet. there are people down in the negative order. >> speaking of being negative. goldman initiates a couple retailers.

with that, and of sale, initiation with the sale, talking about bloated inventory. bionic express. >> i have no idea, they were on the show, on ""mad money"" very smart outfit. really schooled in how to be able to beat this niche. it's kind of a win right between the big guys and the sports wear category is just, it's as bad as hard goods is good. sports wear is very tough. >> would you be getting in front of wal-mart, kohl's nordstrom's all this week? >> i do detect stores report a better tan expected number, the f-corps saying things are better, ralph lauren saying they are better. maybe you can get a trade at nordstrom's? that's not my favorite. my favorite is tjx. i love that model. listen, i can't sell it. here it is. >> the minimum. that's for sure. >> it's the high brand, tjx you are always amazed. >> we love it. we do. >> are we going after the show

today? the one across the street there? >> you guys keep threatening to shop together. let me know, i will book crew to follow you. >> i have been looking to throw a little business around to the lucky brand lulu. >> after the comments the ceo made on bloomberg last week now having to basically apologize saying some women's bodies don't necessarily work in their clothes. >> you can shoot yourself. they ought to merge with ambecrombie and fitch. >> is that not a true statement? >> it's true, what does true have to do with things? are you not supposed to say horrible things like that. you are in merchandising. >> it's not a horrible thing to say. >> in merchandising, we have one size fits all. men's big and tall is also good for small and short. right? big and tall means fat to you? think it means big and it means

tall. >> facebook is up a bit. horowitz sold a third of their position according to sec filings. sounds like somebody else i know and his charitable trust. >> ring the register, there's twitter, it comes public, everyone says it's very overvalued, it comes back down, like facebook. at a certain point if twitter c'mon advertise correctly, it will go back up. remember, you have every right to overpay. i don't know anybody who didn't think it was an overpayment. i'm sure the twitter people privately off the desk was saying, wow, that was little more than we thought. >> 45-10 being the opening trade, what was the high? >> 49 and change. >> got to 50. now we're at 40 today. 3%. >> it's important to point out the investment banker from goldman, west point. >> interesting. >> that's right. >> so it wouldn't surprise you to see this trade into the 30s, jim? >> yeah. >> but a year from now? >> look, if they get it. this is, i know people that hate it. they hate when you say, if they

get it right, it will go higher. how come you just don't declare in the reason i don't declare is google got it wrong and got it right. facebook got it -- i can not peer into his head and say, you know what, in another 38 days he is going to really nail mobile. i don't know, he's probably sitting there saying, guys, let's make more money on mobile. what do we have in mind? facebook, if you go back to that incredible breakout quarter, two quarters ago, they will say, basically, we didn't know what we were doing at mobile. if i would have said they didn't know what they were doing at mobile, i would have been wrong. they fixed it out. >> a lot of the dysfunction of this triple 7 x of washington in the seattle area, the state legislature passing some laws, trying to give them extra tax breaks. make sure that stays in the state. is this something you are watching closely? >> i am a mcneirney fan.

we are in the midst of year two of a seven-year cycle. i never thought the 377 would come back as they did. they were hurt by defense spending. this is one where when the stock goes down, you buy it. >> still up 76% for the year. >> that's okay. it's the beginning of a major cycle. he has a 20-year plan, by the way. airbus, he has enough orders. you can't get one until 2020. you can't shop there. >> you got backlog as they like to say. >> the backlog is miraculous t. presentations for boeing are incredible. the presentations of his ceo is amazing. that's a great company. >> we do have one deal we talked about this morning in the pharmaceutical area. vphm is the symbol. it was a large premium. in fact, a very large one if you go back to what we call the unaffected stock price, even the affected stock price hit with a

nice premium. they're talking about it being creative. shares of shire, a dublin base. this is a case where they're requireing some. you can see biopharma up 25%. >> merck and drugs. this is one they had bank of cin, everybody gave on them. it turned out they bought some formulations. they got the anti-swelling drug that people think could be very big. biopharma, san terra on friday, the other companies need for the build up their pipe. they want to buy, their stock goes up when they announce it. vi virtuous circle. >> in a relatively quiet mna market. this is one area we seen a continued steady drumbeat of deals. >> shire. how about this, david, eli li y

lilly, a great american company, there it goes, downgraded by goldman sachs. why? they don't have enough pipeline. why is johnson & johnson doing better? a little better growth, a little better pipeline. in the end, they have to come with a company they have a 50-50 relationship with. all this has to happen. it will. though. >> lily up 1% versus so much of the group that receives so much price appreciation. >> from indianapolis, colts. it felt like if colts last night 8 points. >> what is going on? >> wow. a zippo. >> my broncos are still hanging in there after a nice bye week. >> hanging in. i'd like to hang on that. let's see what else is moving. hey, bob. >> reporter: good morning, everybody. happy monday morning. a little downside action because if two biggest sector in the s&p, financial stocks, technology stocks have started on the weak side. the s&p is down.

let's talk about why the retail investor is back. it's going in on that front page "wall street journal" article. look, there is inflows into stock neutral funds this year. we had big outflows in the prior years. it's certainly good news. it's not an avalanche or a tidal wave. put up if numbers, year-to-date, according to lipor, $167 billion is going into stock mutual funds. these are mutual funds. that's good news. i'm happy about it. bear in mind the $7.2 trillion in stock mutual funds, we are talking about a move less than 2%. it's good news. still money going into bond funds. there is no great rotation out of bond funds, into stocks. there is still money coming in. waiting for that tidal wave to go out, then i'll start getting really noticeable and excited about it. until then, i certainly agree, good news money is coming in. there is indications that the sentiment indicators are definitely a flashing

complacency, put call ratios, they are all pretty high right now. but mound of money coming in. i don't quite see it yet. the other question is whether the feds will taper in december. boy, was everybody confused about friday. bond yields up. the stockmarket is up. a lot of guys pass around this comment mr. bernanke was talking about the labor market. he said, i think the unemployment rate under states the degree of the market. a lot of the bulls point to the fed would likely not taper in december. opinions on both sides. this quote was widely passed around over the weekend. finally, who says activist investors don't work out. a lot of people were talking about this rig deal. they are increasing the dividend from $2.34, carl icahn is behind that, not only to get two seats on the board, rig already had a 4% dividend. these stocks were doing very well for people whoped dividends.

now, we are talking about essentially a 30% increase in the dividend. that's a pretty impressive number and, david, he gets two seats on the board now. how can this investor do work under any circumstance? >> listen. we talked about it. activists investing here, so much money flowing into the strategy, that conceivably their power is only going to rise, it's funny on activism, you also, they want to talk to the boards more and more. acon is sort of in the land of his own. as we pointed out, there are activists that take different approaches. one hits you in the fails. others want to embrace you at first, hold back the idea that eventually that embrace can become a choke hold. >> what is going on with safeway? is that someone spurring? it has charges it's the next a and b safeway is very well 1 run, a lot of times you see this great news and say, wow, i imagine they got religion, no,

someone spoke to management and said we will make your life difficult. >> jan is if safeway. >> it's interesting. the activists, it's different in terms of record. they are driving that. >> they are. they put an an appeal. they are not as good as kroger the ceo we spoke to last week. >> wow, that's a great company. >> let's go over to carl on the floor. >> david, straight from the opening bell, commemorating veteran's day the superintendent of the u.s. military academy at west point. general, good morning to you. great to have you. >> great to be here. a long time. >> class of '75. >> yes. >> what are your thoughts on veteran's day. >> veteran's day is a special day. americans take time to commemorate veterans, remember their sacrifice, what they have done for our country. particularly over the last 12 years, we were driving up here in wall street and drove past the world trade center, all those memories started flashing back. we knew our life would be different. we commemorate all these veterans that paid sacrifice

over those years. >> how has west point changed since you graduated? >> west point is really focused on development, leadership development. it's changed not only for the military, also in an election. if you look at hoy we are fighting these wars. you have to understand the environment, understand the culture. that's an intellectual capacity you need to develop. >> it's funny, we were looking at this book, it came out over the summer, west point leadership, profiles and courage, it is littered with leaders of the past 50 years, in corporate america and military service, political life, what is it about management lessons that you learned at west point? >> well, we produce what we call leaders of character for a lifetime of service. as you know, they graduate to the military for five years, a number of them continue to go out all the way through to a 40-year career, our chairman joint chiefs of staff, some go into business. but a lifetime of service ises service to your community, service to whatever great corporation that you work with.

it's all service with honor. and that's what's important. >> finally, i think it's december 14th. army navy. >> yeah, it is. >> who do you like? >> army. we're going to break this 12 years' streak here. we will turn it around. you will see a victory. >> our thoughts are with you. here reading the opening bell the dow is basically flat. when we come back the ceo of dine equity. don't go away. >> thanks, a lots. [ music playing ] at farmers, we make you smarter about insurance. because what you don't know, can hurt you. what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead.

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>> a company honoring veteran's day, let's bring in the chairman and ceo of dine equity. you did interesting things last week. >> we did. today we are celebrating it at applebee's. it's here at time's square. we have three initiatives we are undertaking. most importantly, we will give away a free meal to active military who comes into applebee's, we will serve a million folks. we will continue with the mission. military active or retired will come in and lead community efforts in the community that we serve and lastly, we are doing a huge undertaking where we have the thank you movement.com. you go online, thank active military retired. the neighborhood with the most thank yous will get a private concert, if you will, from gavin degraw. so lots of effort.

>> i dig tha. let me ask you, ihop. a lot of restaurant chains are not able to reinvent themselves, how did ihop suddenly sell? >> i think there was a lot of work last year with operations and marketing and advertising. there is no question the work on the menu has had a tremendous effort all the way around. >> in that you are able to bring prices down, is it more complexity to the items? what about the menu changed? >> we made it simpler, easier to read. we had appetizers on the menu, a good example for 15 years. the first week we launched the new menu, we ran out. for the first time, people knew we launched advertisers. it's a way of making it more of a wow for consumers. >> a rather amazing statement you made on your conference call, we will quote you, you will flush it out. you said, i think the way to think about our median and

advertising strategy is we made incredible inroads in a short period of time and the social media states frankly not like anything i have seen in my career? how does this happen? what are you doing with it? why do you make money from it? >> it started with, we found out we were treated every 11 seconds. we got edge gauging with people literally online, tweeting, face boork. we are now the number one food mention in america. >> is that incredible? >> on both facebook and -- >> you see measure. in terms of sales and increase? >> it's hard to make a direct correlary. we know since we have gotten involved, it's been a tremendous wow. the way i tell people, they spend 15 seconds watching a tv spot. they spend three-and-a-half minutes with us on the web. >> i find this incredible. >> they literally will talk to us about where they ate, ate with, same be applebee, not just ihop. it's both brands. >> you have a good window into

the consumer. what are you seeing right now in terms of willingness to spend? >> well, value is key. value isn't just about price, though. value is about the experience. these folks want a great experience. i like to say they want to, you know, a $20 experience for doctor 10, they want value. they want to be engaged with. they want to have a meaningful experience. they want great food. and they want value. i'd say that's the biggest thing we have seeing. >> from a development standpoint, cost of property, real skate development, is that increasing or not? >> it is, but it has been pretty steadily, frankly over the last several years, if you think about land building, we are probably just under $2 million at ihop, slightly over that at applebees. but will is still a lot of interest from our franchise community to develop. >> i imagine the apple bow's frighten is big tore the outback. >> it's similar about 4,900 square feet for both of them,

which in my 4u8ble opinion is advantage. if we want to test new platforms, we can do that. >> one last question, do you pay twitter and facebook anything? >> no. a teeny bit on the advertising circular. but it's pretty amazing. >> there is a good investment. julia stewart, thank you so much for joining us. >> we are back after a break.

>> the dow is up 25. >> it turns out, a company on air right online, in airplanes, lots of more planes coming. don't forget, when you change the way that people with communicate on an air flight, go go is a winner. >> martin. >> frankly, it keeps delivering, i call it mr. coffee, it's in every aisle. >> barclays on sirius. >> they don't see sirius on their, until amplifier department there. it's killing the stock. barclays is pounding it. >> burlington coat? >> a lot of different rules. i got to tell you, my fear is recapitalize, if it's better, if it's cold, boy it. >> piper's raises deck.

>> deckers is back. bicker than ever, ugg. >> american tower by city. >> on this morning on ""squawk"" he quit himself, right here the shorts had a field day with it. the longs have a field day with it since then. >> what will you have a field day with today? >> recontinue to do so, we had general melchar on, the itt of defense. i still think that natural organic is a big theme after what happened with fairway and disappointment with whole foods, let's find out if the company almond milk and coconut milk and soy milk as well. >> we will see you tonight. >> a big broncos family. >> nice. 6:00 an 11:00 eastern time ""mad money."" when we come back jan hatzius when does he think the fed will stimulate when ""squawk" on the street" comes back. really makes my life easier. maybe a promotion is in order.

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>> >> welcome back to ""squawk" on the treat" our road map begins with the market this morning, slightly higher. the dow hit a new high on friday.

we'll talk to goodman's chief economist jan hatzius with his take on the economy. plus twitter falling once again into a bear market. the stock down nearly 20% with the ipo last thursday. can you be a buyer here or beware. >> the ceo of cowan weighs in. >> the big business as seen on tv. yes, from snuggys to flex seal, the company's product makes big bucks t. chairman will join us live with his secrets to success, plus, how he is counting on the public to find his next big product. first, though, talks on curbing iran's nuclear program, ending with no deal on sunday, secretary of state john kerry saying significant progress quote/unquote has been made. talks are scheduled to resume on november 20th. cnbc chief correspondent michelle caruso cabrera is here. >> kerry briefed lawmakers this week of what happened or didn't happen over the weekend.

there were high expectations of reaching a deal with the nuclear program in exchange of crippleing easing sanctions imposed be i the international community under the leadership of the united states. what happens so the talks fell apart isn't clear. some blamed france after that country broke protocol and wants a deal, not a quote sucker's deal. this morning, though, secretary of state john kerry said it was iran that could not commit, not france and the allies on the other side of the table were you nighted. israel's bengals man netanyahu say the agreement on the table did not require eastern to dismantle a single centrifuge. kerry said they should withhold judgment until there is a deal to talk about. increaseingly,inians are under pressure due to sanctions. it is extremely difficult to sell oil. do you to the lack of foreign exchange because of that, the official inflation rate, the official rate is a whopping 30%. the unofficial, the official

unemployment rate 13%, but number russ economists and experts believe both numbers are much, much higher. if there were a deal, it could mean unfreezing of iranian assets. as you see, the oil markets non-plus to come to a deal, it's flat for wti. we have seen the price of oil falling over the weekend on expectations of a deal. guys, back to you. >> still a debate raging on, michelle, those talks falling apart is net bullish or bearish for crude, right? >> remember, charm, probably still very much a long-term question a. lot of oil analysts we spoke to were not planning future iranian crude into their models or expectation. they want to see deal a, and b, there will be inspections. a lot of stuff that happens before the sanctions ease enough so they can start selling oil on the open market. >> it's an important story watch, michelle. thank you so much. back at hq. we want to get you a check on twitter, of course, after

that high flying opo last thursday saw stock give back on friday, down about 7%. and today about two and three-quarters percent. it did cross briefly below the $40 mark. in the words of cramer in the past hour, doing exactly what it should do in a rational market because he does feel it needs to come back after that high on thursday. >> it's that high that we're talking of a bear market. not necessarily where it opposite, some of the highs we saw. is that right softly after. >> with that, the bou is up 20. dom. good morning. >> reporter: good morning, shares of enviro pharma, this london-based shire is buying the company for $50 bucks a share. that's a 27% premium to its close on friday. now, shire is attracted to vira-pharma pipeline. another large company, biotech going after a small one for new

and emerging drug, kelly. that's why those shares are higher. >> what a move. thank you, dom. straight ahead the philipines devastated by a super typhoon. we will get a live report on the latest on the rescue effort there. plus, you will hear from the red cross about how you can help. stay with us. ""squawk" on the street" will be right back. you think about risk. i don't like the ups and downs of the market, but i can't just sit on my cash. i want to be prepared for the long haul. ishares minimum volatility etfs. investments designed for a smoother ride. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible lof principal.

philipines are struggling to reach victims of a super typhoon

that killed an estimate 10,000 people. cnbc is live in manila with the latest on that. good morning once again. >> r. >> reporter: it's well in the evening here. it's past 11:00 in the evening in manila. this is what we know in the last couple of hours the president has addressed the nation. he has declared a state of calamity, a national state of calamity. now this sounds a little bit more dramatic than it is a natural practice. what this means, essentially, is that the federal government will now take over the relief operations directly. so this expedites things a little bit more to get the essential supplies, food, fresh water, medical supplies and shelter to the people in the affected areas in central philipines. we also know that this order

helps to prevent and limit profiteering to a certain degree and price hoarding. because the government will be able to effectively control prices. this is very much a human catastrophe as we have been reporting and throughout our coverage here. it's very much a moving target in terms of the people who have been affected and the overall number of both fatalities. what we do know is in the region of 10 million people have been affected by this super typhoon that swept through the area on friday. the death toll, we are hearing, this is not confirmed, could to be up to 10,000 in terms of the fatality. but the overriding imperative is to get food and essential goods and services to the people who node them this is an extremely difficult challenge for the aid

agencies and phillipine counterparts because this super typhoon has caused an enormous storm surge of tsunami-like proportions that has blocked roads and fallen trees, knocked out the power and also communication lines. this is a gargantuan cost. >> thank you so much for that. for more on the relief efforts, we want to bring in laura how gaines, a spokes woman for the american red cross. she joins frus washington. laura, good morning to you. >> good morning, carl. >> this is being led by the phillipine red cross. the american red cross is doing a lot. you are sending personnel. there is a family tracing service. how can americans help? >> absolutely. if americans want to help, they can go to red cross.org to learn more about how to help. as you said, the american red cross has sent a couple of our personnel over to the phillipines to help with the damage assessment efforts. as we move into this week a little further, we will be sending telecommunications equipment, along with a

telecommunications team to try to really help get their communication efforts up and off the ground over there, so people can stop talking to each other and really get the relief effort going into high gear. >> when we start to hear figures like this, laura, certainly see some of these images, immediately we think about fuchs fuc -- fuchishima. >> you heard your correspondent say as well, the access to the area is so difficult right now, i think we can reasonably say that this is going to be a disaster for the phillipine people of epic proportion. right now the scope and scale, until people can get into those affected areas is really going to be a little bit hard to get their arms around. but what is important to know is that the red cross community, the world community, is definitely coming together to help the people of the philipines. >> laura, what's the top priority right now for the

rescue effort? is it air dropping supplies? we understand there is a shortage of necessities. is it to help people get off the island scrambling to do so? what is the first thing are you doing, is there anything as well you look to prior events for some gains? >> i can tell you the phillipine red cross society is a strong red cross society. they have been on the job before the storm hit. they were working to get the evacuation center opened. right now, they have a life sustaining effort going on, so making sure they can get relief supplies into the people who need it the most is the top priority. it's those things like food and water that are going to be critical as well as we start to see in the coming days, shelter, sanitation efforts. those will become very important as well. we look disasters like the indian ocean tsunami, like haiti. to really see the pattern here and to know it's those life sustaining efforts of food, water, shelter in the early hours and moving onto the health

care and sanitation as we get into the next several days that are going to be critical. >> finally, laura, the "time's" is quoting officials from the phillipine red cross saying some of the aid convoys have been nearly hijacked. we continue to hear reports of looting. how difficult is this going to be from a security standpoint? >> well, you know, i'm not oak, so i can't speak to the immediate security situation there. but i have been on the ground during katrina. i was a part of the sandy relief effort and even here in the states, the very earliest days of a disaster like this are extremely difficult with the access to the area. sometimes it's the security situation is difficult as well. but, you know, troying to, with your airports down, with your roads blocked, this is the toughest part of the relief effort in just trying to get those immediate needs met of the people who are suffering so much. >> 1-800-red cross or

redcross.org, laura how gaines with the red cross. thank you so much. >> thank you. coming up next, twitter is falling again. the stock is down 15% from its ipo. the question now is whether that means a buying opportunity or is there more to come? we will get into that when ""squawk" on the street" continues. . . . test. . test.

>> welcome back to "swauk "squawk" on the street" eli lilly is citing the possibility of the pipeline. they don't have enough of proper reves in the future. some of the major sales contributors are losing patents in the coming months, like sim bal that, a treatment for depression. back over to you. >> we focus now on twitter down 15% of the ipo high of over $50 on thursday, it's now a good time to buy in.

joining us is robert peck and robin humphrey with a buy rate of $50 price target on twitter and kim forest-manager of the total return fund, she's avoided investing in twitter so far. good morning. >> good morning. >> first to you, you had a call that looked fresh when twitter was hitting $50 last week. why do you think we have stagged so some extent coming off the heels of that successful launch? >> we initiated over aen moth ago as you know, calling for a $50 target by the end of next year t. stock was priced originally at $45 on the first kick. it had a supply demand imbalance. you are down 9% since the ipo, itself, once again, we think our investors can get it around $40 or. so you will get your 20% annualized return to our $50 target at the end of next year. >> there are people saying, in fact, frapgly, when they listed, there were a lot on the institutional side, saying they

expected it to drift back down to the mid-30s. so are you going to recommend this company all the way? because people might have another 10% to go on the down side if they're getting in here. >> you could, by the way, one of the things we talked about is over this first week, you will continue to have the supply already demand curves in balance. it will go out. other funds can get as much as they want, trim what they have. our $50 target is a year out. we think by that point everything will settle in, hit our target. >> kim, there are a lot of companies out there make a living not making money, we cover amazon a lot, companies like zil lo, there seals to be so much attention to why twitter quote doesn't make money. i wonder if they will be under more pressure to somehow turn some kind of bottom line profit in the short to medium term? >> i think they are under tremendous amounts of pressure and actually if your viewers were watching the last segment before the 10:00 hour, criminal cramer was asking the ceo i guess of applebee's you know

about their twitter use and social media in general. he was over the moon with how their customers talk about their products. however, when asked if they actually spend money at these sites. >> we were there for. no. no. i'm like, oh, look at that. i mean, that's my biggest objection. i'm a user of these services, i'm not a payer. i like companies that actually get revenues from their clients. >> to be fair, they do have big deals with the nfl, with our parent comcast, that are paying deals. it's a matter of putting together a few more like those, right? >> it's going to be difficult, i think. because why pay for something if you can get it for free? and that's really, what the issue is here. unless they put some kind of barriers to entry or give them some kind of unbelievable value, which i'm just not seeing at this point, why not let people and promote the sites, say go to twitter, talk aboutt it.

you know, we're not going to pay you. i don't understand how they can restrict that use. >> to that point, what do you do then? do stru a path towards monetization? what does the price target imply the success twitter has in monetizeing service currently? >> they realize, first of all, you can use google as an advertiser as well. they have $50 billion in revenue. you see the same thing happen at twitter. they are already over $600 million this year. they will be at $1.2 billion next year. revenues accelerating. i think you have seen traction there. i think the question is how big can it be? for us, we look about $2 billion of revenue in 2015. for investors, we're looking at buying the stock in the mid-40s or so, they're trying to see what revenues can be out in '16, '17 to justify targets higher. >> what about looking ahead to the first earnings report, do you have a sense of when that will come? i imagine sometime in

mid-january or early february? >> yeah. i would guess towards the end of february. they will space out between the other big players. goggle, facebook, amazon, et cetera. >> it would seem if you look at facebook, again, it's not a perfect fairson. that's a classic example where they had a footing until a couple earnings reports back-to-back indicating mobile and other things, why won't twitter fall prey to that kind of evolution here? >> yeah, a couple reasons, facebook had a perfect storm on its ipo. they were getting acceleration in mobile usage which at that point they didn't have a product, a monetizable product for facebook at that point. that's just when usage was accelerating at the time of the ipoa. very difficult transition point for them, terrible timing for the ipo. twitter as you know is mobile first. that's where their products are. i don't think you will see the same product here at twitter. >> we'll leave it there for the time being, kim, bob, thank you for joining us this, mo. we continue to watch this stock, appreciate it.

>> thank you. when we come back the ceo weighs in on the markets and the economy, find out where he thinks we are headed in this final part of the year, more important, what is ahead for 2014 when we come right back. n who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. [ passenger ] airport, please. what airline? united. [ indian accent ] which airline, sir? [ passenger ] united. whoa taxi! [ british accent ] what airline, then? [ passenger ] united. all right. [ spanish ] what airline? [ passenger ] united. ♪ [ mandarin ] which airline? [ passenger ] united. [ arabic ] which airline? [ passenger ] united. [ italian ] where are we going? [ passenger ] united.

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>> and a little less than an

hour into the trade. here are the stories we are "squawk"ing about. transocean among the biggest gainers on the s&p 500 up 3% to billion ayre investor carl icahn. the oil services plan to pay out a $3 a share dividend and reduce the maximum number of investors from 11 to 14. >> that would be an increase. to 11 from 14. best boy rising 3% after being upgraded by ubs to boy neutral on a prospect earnings growth. the electronic retailer up $270% so far this year. dow component p many and johnson & johnson hitting an all time high. >> another budget showdown looming, of course, we got yellen in front of the senate banking committee. is there a correction ahead? jeffrey solomon the ceo of kellen and company joins us.

>> it's good to be here. >> listening to the headlines, everyone wants to believe there will be pain involved in the next three to six months. do you think that's true? >> there could be. there is always a shot you could have a 5 or 7% correction. it's been agree great year. take new risks coming 84 end. but having said that, what we have seen over the course of the path month, people are buying the disc coming to year end. >> that suggests equities are not overvalued. i'm not in the near term pessimism. >> do you believe there is a big retail push that's gaining steam here in the latter half of the year? >> i think as people see other people making money, they want to be a part of that process. you know, people have said this rally is long, too. i think equities are reasonably valued here. so what we're seeing actually is more sector rotation i would say than what i say wholesale

selling as a risk. >> a lot of people talking about sector rotation here, what is going on? is that because of the fed? >> low interest environment. it's hard to make if argument you should be buying bonds. i think there is more risk to bonds than equities if terms of gat moves. in june, that was a big gat move. i think people are looking at the winners this year. the biotech is up huge, it still is. people are saying i should take gains there and reinvest in other areas that haven't seen that news. >> what worries you the most? i know we are focusing on next year. people say there won't be a big deal. we might get at a deal so we can get rid of sequestration. >> it's possible. i think there is a path. there with is a path for a long time. it's whether or not people in washington want to get around the table and work that out. the big concern i have is the

obama care overhang is not good. i think if you are locking at a potential problem, it would be that obama care isn't really working. you get this ground swell in congress yet again to try to overturn that. and that's what happened last, last month. >> that would not be great for the u.s. economy if we get back in that struggle. they're not good for stocks. >> you think one of the best keys to market sentiment is the after market. of course, we are coming off twitter last thursday. it's pretty healthy. >> it is. i think that's a lot of that has to do with what happened with the jobs act a couple years ago. i think the jobsing a provided for a great -- jobs act provided for emerging companies to act says capital in the u.s. it's something we have been working on a lot in d.c. with policy makers. we lobbied hard. it's worked out well as a blends, thoughtful piece of legislation, bipartisan, mind you. >> is it too early to know? if you look at the activity, the

jobs act has been good at getting companies to list, the question is whether they will be good for investment. not that it has to be 100%. are we going to turn around in a couple years and find out a lot of these companies we have hardly time to talk about we are listing every day with less transparency required in the past didn't turn out to be such great. >> does that not less transparency and disclosure, what there was in the jobs act is three major thingsch one is confidential filings. it's the process that goes on before companies list him actually, be i the time they list there is 100% full disclosure. test the waters meeting encourages investors to meet prior to the ipo. it makes for better ipo buyers. these investors who invest, this is not the first time they've seen them at the offering. >> that wasn't the days before. so i think those two things along with the roll back, there has been a partial sarbafes rollback a. hiatus.

all these companies we are taking public are fully aware they have to comply. so they're putting things in place. so i think what we have seen is really a solid effort on the part of legislators and regulators to get this right and certainly, there is risk involved in equities. but the ipo process is actually. >> real quick to the capital markets, which you obviously see. we are in the midst of a nice period for ipos, witnessed what are you talking about. what do you expect next 84? how strong is it compared to years past? >> i think we continue to be strong. we are working on things as you know in d.c. to actually help the after market for trading and stocks. we published a report this morning as a part of this task force that i'm on, which is the equity capital task force here geared towards improving certain agency suspects of the jobsing a and advocating for simpler markets for small companies that really benefit this ipo and follow on phase we are seeing

for small companies. i think it can be very meaningful coming into the year next year. >> finally, down yellen breaks the news next week? >> i think there is risk there she tips her hands on where she is going. i think she is very schooled. there is risk i would say in the near term to volatility would be she tips her hand and says something about a particular date the market wasn't expecting. by and large i think we know where she is. she was a good choice to help us load us no the next couple of years. >> thursday will be interesting. >> it will be. jeffrey, great to have you, thanks, for coming in. >> gas prices falling 14.5 cents in the last three weeks according to latest lum berg survey. will provisions keep falling? hi, jaqquie. >> west texas intermediate is now trading in the green. the big story in the pits, today, is those talks, the international talks between iran

and the p plus 1 group that ended up having no deal, no resolution. you know, there was criticism the u.s. was taking a soft approach on the deal. yet, iran couldn't come to the table and negotiate. in the meantime, it's not having an impact on oil prices the way international news like this once would have. we are seeing a little of a c change with how we look at oil with our domestics being high to move oil around. meantime, sources overseas tell me the big loser is iran, they've seen a hit to their currency and domestic revenue, it would be in their best interest to negotiate a deal. one more data point i want to highlight, october china industrial production coming out higher than expected. a little of a bullish sign for crude. most traders say you see a boy on the dip mentality today. they don't expect it to last. they are looking for prices to go lower. we are watch tag low of last week 9307. back to you.

>> jackie, thank you so much. let's go over to domenic chu. tesla is back above 140, dom. >> that's why we are keeping an eye on this one. concerns dice down over the weekend the owner of the latest model s to erupt in flames said he would buy other in a heart both. he went on to say given the severity of the accident, that car, the tesla, did, kelly, save his life. back over to you. >> thank you, dom. coming up next, mexico has long had the reputation of making cheap small goods. but that's changing and fast. we'll tell you what it means, plus, goldman's jan hatzius is joining us with his take on the market. ""squawk" on the street" will be right back. welcome back. how is everything?

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policy. friday's better than expected jobs numbers fueling new rumors a december take is back on the table. the chief economist for gold man sachs joins us, jan hatzius. does any of the recent data points change your mind? >> our baseline is still march. i wouldn't rule out an earlier move. i think january or even september is possible. but it seems to us that it's more likely that they'll wait until the entire transition in fed leadership is behind us. i also think that they will combine the tapering with a shift in the forward guidance and our baseline will be march. >> it's going to be interesting to see how the market will react. frankly, the communications aspect hasn't gone over as well as the straight out buying or not of bonds. especially as janet yellen takes over. this has been her area.

it will be a big test for her. >> it will be a tough transition, of course, probably always is a tough transition, in particular, in an environment where policy is somewhat influx, where there is a sense that they do want to scale back the qe program at some point, but, of course, there have been many twists and turns already in in saga. it will be hard for her. >> it boils down to the sense we care more about your actions than your words the market seems to be that way about the feds. we care about what you do, less of what you say. if they're moving towards a policy more and more determined of what they're saying of reaching these goals, doesn't that potentially open, weigh more volatility? >> potentially. i think that's the worry that prevented them from tapering in september. at least i think that was a large part of the story, that they had increased their assessment of how importants buying stuff is for changing the market's mind on the bonsd rate path.

so they shied away from it at that point. >> that is going to be a question that still hasn't been totally answered. >> so jobs, the isms, some of the pmis, right? gdp. have you been impressed with the recent series of data in this country? >> generally, yes. the numbers. you can pick holds in some of these numbers, in particular, the gdp numbers which i think overstated the underlying strength because of a surprisingly small decline in government spending. that's going to set the stage for a big drop in the 4th quarter, i think, and a fairly sizable inventory. the isms, the chicago numbers the payroll numbers, all of those suggest that there really hasn't been a major hit from the government shutdown. >> is the economy react sell rating into the fall? is it that sim 'le? >> it looks to me like there has been a little acceleration. if we look at our current activity indicator, which is a way of combining all of the incoming information, that seems to ab sell rate a bit over the

last six months. we think there will be further acceleration into 2014 as the impact of the fiscal drag diminishes. >> there are plenty of people out there saying the equities could have quite a ways to go. i wonder if you think the feds will take asset price noose consideration if not more so than they have in the past, even with consumer prices still being really low by historical standards? >> i think they will always take prices into account in looking at how their policy is being transmitted to the real economy. so as stronger equity market, low bond yields, now credit spreads, all of that says to them, we have having some traction. >> that, of course, is going to have an effect on what they do and i think it is one reason that my tapering sometime early in 2014 is the most likely outcome. i don't think that, of course, there are difference of views across the committee on this, but if i look at the leadership,

i don't think they think we're in a new bubble, though. >> but it's interesting, because they are going to come under more pressure from whether it's the campaign trail into 2014, into 2016, some of the coverage again, the journal talking about the way it's affecting investment. this says the federal reserves are playing into the widening disparity in the country could put them under political pressure increasingly in the years ahead. >> i money, it's a bill politician issue. i think they are responsible. it would be, though, that the way that monetary policy affects the real economy is really only one way of doing that. namely via the asset markets and in most cases, the impact of that, at least on the distribution of wealth is going to be more wealth for people who own the assets. now, it's also the question of what's the impact of the income distribution from changes in the labor market. if you have a stronger labor

market. >> that tends to help the people on the bottom end. it's somewhat complicated message and, of course, its not something that lends itself easily to sound bytes, you know, when you are asked in front of congress to explain what you are doing as the military policy maker. >> speaking of sound bytes, i will need a short one from you. many thought we would have a taper already in the fall. we didn't get it. in part, because of the worry of the government shutdown we got. we are headed into next year. that was a possibility. >> i think it was an important issue in september. that i have gotten pretty worried about the political dynamics in washington and i think they wanted to get through this particular stage of. that if you had another nasty fight around shutdown or debt ceiling. >> really. >> i think that is something that could push it out further.

we think it probably will be a little easier the next time around, in fact, we think the probability of a small fiscal deal, you know, no grand bargain, a small fiscal deal that averts the next stage of the sequester has gone up a bit, partly because the next stage of the sequester is much more focused on defense spending and that probably is going to make it a little more palatable for the republicans to make a deal on that issue. >> mr. cowen, good to see you. >> speaking of disparities, there is no zwings between the disparity between u.s. and mecca. workers are turning out high quality goods, prompting companies around the world to open up more plans there, fill le beau joins us live from mexico with some more on this phenomenon. good morning, phil. >> reporter: good morning, kelly. we're on the floor of the plant for a japanese auto parts supplier. they are going to be building

exhaust systems as well as control modules for nissan, general motors, mazda, they're exploetding here. they're in the midst of a hiring boom. they are going to 1,400 workers a year ago. by the time this expansion is done in the next few years, they'll be up to 3,100 workers. that's what we are seeing throughout mexico when you look at the auto and aerospace industry. this has become the hottest place for the growth of those jobs. primarily because it benefits from a number of factors, including trade agreements, low cost, et cetera. take a look at this, a lot of people sit there and say, around they shipping jobs to china? look at the cost difference for jobs and exports out of mexico versus china versus the united nations united states. they have to realize members ka has become the hottest export hub. >> there is a new reality that's out there, which is that mexican plans are very advanced

technologically. sometimes comparable or greater than you find in plants in the u.s. at wages of a fraction of u.s. level, there is a natural magnet to locate more production in mexico. >> and if you want an example of one company that's really benefits from this boom in exports from here in mexico, take a look at canton southern, this stock is up 61% in the last year. ksu's mexican revenues have gone from 1.02 become, just a few years, this year, versus $894 million in 2011 and the reason is, they control the rail loins for shipping finished vehicles out of mexico through laredo into houston and because of the explosive growth, guys, they're benefitting. so that's the story. we'll be here the next couple of days. it's a huge story when it comes to manufacturing in north america. >> rails, i love it.

fill lebeau in mexico for us. now, if you love your flex seal and can't live without your snuggy. you know as seen on tv, the company that nation big bucks, it's giving consumers to create the next as seen on tv hit t. company's chairman who also founded the home shopping network, will join us live to tell us more when ""squawk" on the treat" returns. . [woman]ask me...

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welcome back. the company that brought you the snuggie and the ped egg giving consumers a chance to weigh in on what they want next as seen on tv launching a platform, what will be its next great hit? kevin harrington chairman of as soon own tv and one of the original investors on "the shark tank". good morning, thank you for joining us. >> a pleasure to be here. thanks for having me. >> it's fascinating, you've been a pioneer in many invasions that are typical, as common to america as apple pie, going back to 30-minute infomercial in 1984, then home shopping network, as soon on tv.

it's telling you're get into crowd funding. why and how that is going to work for you as a company? >> so many inventors and so many people with ideas, if you have a problem around the house, what do you want to do? solve it. what do you do with it in don't know where to go. we are going to have an opportunity for these people to come to as soon on tv.com, put their product up and actually get funding for their idea, their product. define the next snuggie, as we've been saying. >> those products that have become best-sellers that we know and love so well, were those developed in-house, in other words, isn't this a variation on how a product comes to the fore anyway, as old as time in. >> we have two development tracks in our business. one is inventors that come to us, people with ideas, and secondly, we develop things in-house. it's sort of a mix of both. and we really find some of the most innovatingive ideas from t

marketplace where people bring us problem solving ideas. that's why we think with the crowd being able to help give the kind of blessing of liking the product, when we put it on our site, that ligive us an ide of what to focus on in putting energies and capital. >> who pays to build an original prototype? who gets royalties? for what period? >> so in a normal situation, when an inventor comes to us, we would generally license the product and we pay everything and then we pay them royalties on all sales. in the case of a crowd funding site, the crowd will participate in that process and maybe advance purchase a product, showing they have a strong like of that product. so, when we see a product take off on a crowd funding site, we'll know which ones are the ones we should be focusing on

ourselves. >> right. the interesting question, though, will become how much is enough for there to be a critical mass. will people have to commit to buying it or can they indicate they like something? >> well, both. certainly we will take advance orders are for many products, the products, some of the products will exist and be ready to ship. and that's a good thing. because now you know we're not only crowd funding but able to fulfill the people's desire to have that product, the first on the block. one of the great things about the tv industry, it puts a smile on your face when people see products and people love to talk about so many crazy things they've seen on tv. they're the first ones to experience them. >> speak of crazy, kevin, early products, a taco susan, lazy susan style tabletop holder for various taco fillings, point, but kitchen is always a

big winner. that price point on that product is attractive. but the pet industry has been very, very successful over last couple of years in direct response also. the bone mat is a problem solver because it kind of keeps the mess of the bones all over the house away from -- keeps it contained in one central area. >> i know what i'm getting carl for christmas. >> it's not a joke. anybody with a dog understands that. thank you so much. we hope you'll tell us how the holiday season is going. kevin harrington, chairman of as seen on tv. mr. rogers once asked, won't you be my neighbor? the tech industry's asking the same thing and spending money to convince you. is of a better future,

this veterans day we honor our men and women of the armed services. so many who fought for the country feel neglected by the department of veteran affairs.

cnbc's brian sullivan reports. >> outraged his treatment. >> reporter: as a sister begged and pleaded to get help for her brother, army veteran joseph petite, who took his own life, she says as a result of being overmedicated. >> took over 20 pills a day as prescribed. >> reporter: which caused him to hallucinate. they found him several, several hours later in the bathroom where he had committed suicide. >> we have a specific instance in atlanta where there were suicides that happened, drug overdoses that happened within the facility. and these individuals actually got bonuses. >> the v.a. told us it has been, quote, strengthening the facility's mental health program with initiating new procedures for supervised urine drug screens, visitor and escort for patients. go to investigatesinc.cnbc.com.

>> rlx, retail index, getting a little love in a mostly flat tape. a lot of calls on various stocks today. we mentioned initiations out of goldman on the like of ann taylor and express, best buy, ubs, going to abuy on one of most high flying names of the year. >> and gas prices have a lot to do that with that improvement in sentiment. >> financials, as cramer mentioned in first hour, david, important to see how they responded on friday and whether or not they assume new leadership. >> haven't see much sign of it thus far most having been down the last time i checked a few moments ago. there was a nice rally friday. and the idea of course that you start to see more of net interest margin if rates continue to go up. >> nyse a moment of silence 9:25 this morning. we take you to arlington national cemetery where they will hold a moment of silence on this veterans day.

>> there is a look at the president at ar ling tolington cemetery with the first lady, dr. jill biden arriving and honor guard troops, loud booms, perhaps 21-gun salute did mark the president's arrival, the tomb of the unknowns, of course, is the site of the remembrance. and i think he's also being joined, kelly, by the oldest believed to be living world war ii vet, richard overton, 107, fought with the army's 188th, had breakfast with the president and escorted him to the tomb of the unknowns this morning, just an incredible story. >> 107 years old. >> 107. >> wow. ♪

♪ >> order. >> present. >> present.

[ drum roll ]

♪ ♪ >> order. >> order. >> arms.

>> there goes the president at the tomb of the unknowns, along with the honor guards on this veterans day. that followed moment of silence at new york stock exchange. actually the second moment of silence. around 11:00 but they also added one around 9:25 before the opening bell. to honor those who served the country through the years. >> bond market closed stock market open. we'll watch the action. international deal on iran's

nuclear program that appeared to be close heading into the weekend has fall an part. that is sending oil prices higher, especially brent. take a look where oil prices are trading. wti up a half percent around 95 mark. without a deal, where do oil prices go from here? let's bring in the director of market research at tradition energy and cnbc contributor. good morning. >> good morning. >> that spread has widened. there was a lot of optimism priced in. what happens now? >> i think you're seeing a logical reaction here today. you know the markets, i think, got ahead of themselves last week, brent was off really sharply and broke down through some technical support level. so it's not surprising that given that we don't have an agreement coming in today, for which you know, i think again, the markets were a little bit ahead of themselves there, it's no surprise that we've bounced back. >> it was a big call going into 2013 for a lot of folks that we'd see the spread widen

considerably and it frankly didn't happen. close to almost parody earlier in the summer. what's the view now? does wti continue to drift lower while there's upward pressure overseas? >> depends on the iran tacks. the u.s. benchmark wti doesn't have the fundamentals to rally here and probably will drift weaker as we go into the fourth quarter. you know given that we haven't had demand show up in our stockpiles are so good. though distillate supplies are a worry as low as they are ahead of winter. without more geopolitical problems, it's going to be hard for brent to move higher. as long as the two sides are talking, i think brent stays under some downward pressure though 103.25 on the prompt contract for brent is strong support. >> you make the point, as long as two sides are talking. what point are we at a -- on a

straight trajectory towards sanctions? it's night near-term factor but when does crude get jumpy here? >> you know, i would say that if we were to -- i guess there's talk schedule for ten days from now to resume what appears to be a good starting point. and if we were to come out of those subsequent meetings and they were long faces on both sides and people throwing up their hands and saying we're going back to the drawing board, i think that would certainly put brent back unsoder some upward pressure. >> gasoline, we keep looking at targets ut of aaa 3.10 for year end. are they being too optimistic not or not on mptimistic enough >> gasoline prices is very fa r favorable as it is. bounce off of two-year lows last week on the futures.

so prices are about as low as they can get unless we were to see some more erosion in demand or a complete collapse in crude prices i don't think either of things are going to happen. aaa, great to talk about national average down to 3.10, we're going to trugle to get there. >> briefly, one of the ballot initiatives in colorado included anti-fracking measures that passed. is the tide turning against new technologies? that is important for oil prices here? >> i don't. i think that what you're seeing with some of the new fracking legislation is nibbling around margins and trying to just make sure that the environmental regulates are at the state level have their hands on what's going on. everywhere we look, we see growing production numbers, we see growing production forecasts. you know, natural gatt production in the u.s. is hitting record highs as we speak. it's really jumped up through 1.67 bcf a day on the back of

hydrofracking and the high oil price, as long as oil prices are high, wells will be drilled, natural gas liquids will find markets and we'll have plentiful supplies supplies of dry, natural gas as a result. >> thanks very much. addison armstrong. >> sunday delivery's reality. partnering with the u.s. postal service, available to amazon prime members in los angeles and new york. available to cities like houston, phoenix, new orleans by next year. jon fortt joins us on a big week for amazon, not just shipping but alpha house friday. >> i haven't seen it. read a lot about it. funny and politics together. >> yes. >> we'll have to see whether america's ready to laugh about all of this stuff that we've got going. >> we've already cried. maybe laughing is next.

>> maybe free shipping coming to sundays will be something to help people get a smile. ann it's an interesting move for amazon, given a few days ago the threshold for free shipping, if you're not a prime member, will rise to 35 bucks from 25 bucks. a clear move on amazon's part to enhance the value of amazon prime, jeff bezos knows when they get them in they order more. maybe increase loyi till. if i order something around thursday, friday, we've got the gap over the weekend, when it's going show up. for new york and l.a., less of a gap. i guess i moved out here in time. >> now we know why you really were okay with coming. how what we are talking about for sunday delivery, there are newspapers involved, as well. does this extend to all amazon

products but just people in those cities? >> appears to cover most of the products. we'll have to talk to them about that. jeff bezos is fond of newspapers. >> whether through usps or their own distribution centers which they continue to add, working at getting the product to your front door as and quickly as possible, no matter how much it costs. >> spending quite a bit on that lodgistics infrastructure, thats why they continue to most of the time report losses these days because they're building that out. they're careful to, it's because we continue to see growth here. there's been a lot of interesting stuff written lately about if amazon wanted to post a profit right now they could especially in the more mature businesses but these are areas they continue to invest. >> love that. we could make a profit if we wanted to. >> if we wanted to. >> jon fortt. wall street meets main

street when the 22nd annual schwab impact conference kicks off in washington. with the coordination of the conference, a new survey how financial advisers are feeling. you might be surprised at results. tyler mathisen has more in washington. good morning. >> good morning. i promised to bring you back dozens of tote bags from the conference. 2,000 registered investment advisers here at 22nd annual schwab impact conference in the nation's capital. why is this interesting? it's interesting because these investment advisers are the folks who work with individuals on main street, communities, probably manage some of your money. one of the interesting things they did, they surveyed, schwab did, more than 800 investment advisers who are responsible for managing more than $200 billion of your money. some of the more interesting findings were, as a group, these registers investment advisers are fairly bullish about growth prospects in their businesses, in their industries.

that basically suggests that the need for, the demand for, investment advice and portfolio management, these folks see growing over the next five years. now here's another interesting finding. more than half of the rias say that clients want most especially more low-cost investment options like index funds. at the opposite of the spectrum from, say, hedge funds, they want etfs, index funds. it may suggest, folks, that people are less inclined to trade actively, to buy individual securities, and that at least this class of investment advisers see as the future low cost investment options, etfs, index funds. tweets here, 401(k), middle class more likely to save at work. yesterday, saunders speaking, stocks undervalued on forward earnings. tech trends, mobile cloud integration, whatever that

means. they're all about mobile cloud and integration. i'll be back at 1:00. maria will be here with special guests later in the day. >> we'll hold you to the tote bags. see you soon. tyler mathisen. terrible tragedy in the philippines, thousands dead after one of the most powerful storms in history slams into the islands last week. live on the ground in the philippiness in a moment. dow's up 17 points. [man]ask me...

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one of the worst storms in history, super typhoon, slammed into the philippines friday, leaving thousands dead, hundreds of thousands more without a home. cnbc is live in manila with the latest. good morning from us. good evening where you are. >> reporter: yes, it's past midnight here in the capital of manila, we're in day four of the disaster. from what we understand the essential supplies are still not getting through in any meaningful quantity that's because of the severity of this super typhoon, you called it correctly, healthcare.g haiyan archipelago friday and its real destructive force came through the 300 kilometer-mile-per-hour winds and the storm surge, 5 to 10 meter tsunami-like waves how

some of the officials described it to me. they were not banking on this. i was talking to a political commentator who has a pretty good handle on the philippine government, and he was telling me, yes, they knhaiyan was comiy didn't think it would be this bad. authorities were caught off guard. they did do a lot to their credit in terms of contingency planning, that's what i've been hearing but they did not bank on the scale, the severity of this tropical -- this super typhoon, i should say. what we also know that is the delivery process has been excruciatingly slow because of the road conditions, fell trees, debris all over the main routes. access is very difficult. the ports are closed. airports are absolutely decimated. communication and power is still down. this is going to be a gargantuan

relief operation. back to you now. >> thank you, sre. a look at energy sector, as oil comes under pressure. it's trading near, let's see, take a look at the sectors, we've got four in the red and six or so in green. energy sector is one of them, on the back of a move higher in oil prices. dominic chu has more at headquarters. >> that's right. energy stocks are led by transocean, tigger rig, carl icahn reaching agreement with the company on $3 per share dividend and reduction in the number of board seats. other stocks higher in the energy sector include murphy oil, devon energy, halliburton, helping keep energy as a sector slightly in the green so far. back over to you. >> thank you, sir. next, social networks like twitter and facebook focused on connecting millions across the world.

the next guest has a different idea and it's thinking all about local.

tech companies like twitter and facebook allow you to connect with people all over the world. instead of global could the next beg thing about the faces outside your front door? a private online social network for neighbors, raised over $100 million, including funding around $60 million. sitting down together for a cnbc exclusive interview, the co-founder and ceo of next door and bill gurly. they join us with jon fortt. good morning. >> good morning. >> i know you're in 20,000 some odd neighborhoods but those who never heard of next door, explain it. >> it's a private social network for the neighborhood. we know about facebook to connect with friends and

linkedin to connect with business associates, twitter, to connect with people who we have in common, what about our neighbors? that's where next door comes in. >> bill, quite a shoutout in a recent piece talking about how you rolled up sleeves and gotten involved from hiring to strategy there at nextdoor. tell me business model wise, you guys have said for a long time, not interested in monetization but give than twitter ath had its ipo and everybody's talking about revenue, do you see context actual advertising or local services being play for revenue? >> i think if you look at over the past, say, 10, 15 years in the consumer internet you've seen a pattern repeat itself over and over again which is you see a website take off where the users are contributing to that website and for the first five or six years you're focused on growth. once it gets really, really

large you see people come back and work monetization and the highest market cap names that we talk about like linked in, twitter, facebook, they all started that way. with respect to nextdoor in particular, when it peaked in 2006, u.s. local advertising was over $100 billion. most of those dollars were going into channels that are under threat from technology, local newspapers, local radio. those dollars have come down, not to mention yellow pages, they need somewhere to go. we think this will be an incredible as set where which mon mon mon monitize. >> how big is mobile in terms of engagement and in terms of user time accessing nextdoor. >> our mobile users are the most engaged on our platform. it makes sense because we're a social network all about local.

so when you're thinking about creating a lifeline to your neighborhood you want that not only when sitting at home but away from the neighborhood. and that's what nextdoor for mobile provides for you. >> bill, it's interesting, because we saw a lot of traditional publishing houses like the "wall street journal," "new york times" over the last couple of years decide local was the future and start locally focused sections only shut them down within a couple of years. it didn't seem to work for them. why is it going to work for this kind of company? >> it turns out that the skills that are necessary to tease together an online community, make it come alive are nuanced and not held by that many people we've been lucky to get him back a couple of times now. he and his team understand components what it takes to put a community alive.

putting a couple of links and news stories saying come to our local website, that doesn't work. if you have the ability to get the community part right, you end up with a much more high fidelity signal. awesome content. and the thing tends to come alive. i think it's the skill set of the team that separates this from those other efforts. >> finally, bill, you're on the board of zillow, on open table, on the board of huber and in addition to nextdoor, how do you manage to keep so many models in your head? >> like i said, i'm lucky enough to work with great entrepreneurs in every one of the cases, there's an amazing team that's making it all happen. i just try to work as hard as i can in the background. >> we'll be watching this one for sure. thanks for your time. good to see all of you. >> talking nextdoor. >> it's a good product. i've used it for a couple of years. got the app on my phone, thwarting neighborhood ne-er-do-wells trying to break

into houses. >> i tried to sign up but they wouldn't accept my phone number. it's a long story. it's detailed and difficult. thank you, jon. the dow 25 points. s&p 500 green. nasdaq struggles this morn as we keep an eye on momentum names. looking for an area of opportunity, one sector, we'll tell you what is it in a couple minutes. bells are about to sound across europe. lots of focus on what's happening that side of the pond. a few minutes left to go. the close of the session there when we come back.

european markets are closing now. take a look at european session, mostly green. markets across the uk and continental europe up, stocks held in part by m&a news, and chinese industrial production and other data, up 10.3% last month and that did beat forecasts. a look across the major bourses. london, ftse 100 up a third. dax up and the strongest of the pack, france and italy, up .8. on the m&a front,shire on the ride in the london session, after striking $4.2 billion deal.

a maker of drugs to treat rare diseases. rights now go to rival bt group, and bskyb, down 10.5%. not down 10%, the price of crude. let's get a check on energy and commodities. >> as we're heading into the lunchtime session, seeing crude futures higher here. over95 a barrel, seeing anear 1% gain in brent futures, driven by the news that iran fail to reach agreement with the nuclear plam and that would potentially ease sanctions for the country. that not having an impact on west texas intermediate. seeing more of a buy on the dip mentality today. traders saying that the drop that we've seen over the last few weeks coupled with a weaker dollar why we're seeing a bit of

a bounce in wti prices. all of this great news for the consumer. 14.5 cent drop at the pump, pain at the pump decreasing on lower oil price according to lundberg survey. a quick check on gold prices. lower in the session but holding over 1280 and declines and the selling pressure after the stronger than expected jobs number last week. back to you. >> jackie, thanks. let's bring in bob pisani. >> mixed, utilities, health care, staples, defensive tone to the market but mixed what's not mixed what the 3d presenters are doing. you know how popular they are. numbers increasing every quarter. take a look at big names today. a german 3d printing company, only public a month ago, the stock's doubled in 30 days. these stocks are all up more than 200% in the last year, but

strat stratsaysp all of them to the upside. retailers that talked about opening thanksgiving day, moves up, 3.5, 2.3%, best buy, macy's, kohl's to the upside. energy stocks, carl icahn, activist investor, he's having an impact this year. not only increase the dividend 30% on transocean, now 5%, but two seats on the board as well. dragging up big drillers, oil drillers moving to the upside today. a lot of discussion this morning, down here, over the weekend, whether the retail investor is back. the journal had an article on the front page of that. i'm more reserved than they are. stock mutual fund flows have been terrible for years, since 2008, $200 billion taken out. outflows for year except modest inflows in 2010.

look here, 2013, $167 billion in stock mutual funds and it's m e mutual funds you want to follow. not an enormous trend but going in the right direction. what the trends are in the mutual fund. stock funds for the last several months and all year seeing inflows. corporate bond funds are continuing to see inflows, high yield has been seeing small outflows recently. big outflows are occurring in treasuries and munis. bottom line, we are seeing changes but they're holding on to their high yield fund and corporate bond funds, selling treasuries and munies. on aggregate, id be impressed if we started getting huge flows out of treasury. and munies. and throwing all of the money into stock funds, that would impress me. as of now, money going into the bond funds. >> i was in the store over the weekend, it was crowded.

>> that's the entry level machine, what we had creepy crawlers as a kid, make plastic molds -- you're too young. >> i had creepy crawlers. >> when? >> you know, this is -- i'm a child of the '80s. >> you could make your ploen pla own plastic toys. now you can make your own plastic companions in a few years, who knows. >> sam stovall and scott ren, with wells fargo advisers. good morning. >> good morning. >> bob was detailing this great rotation, where the investor, retail investor is putting money these days. a big story in the journal about this in as well. how much of equity performance predicated on retail fund flows and how much interpreted as a warning sign. >> i think it's good to get the retailer back into the marketplace. i still don't think that you have a majority of them there. so at this point, i wouldn't say

that it's a good contrary indicator. we still have a month and a half to go in the year. i think anecdotally, fund managers are behind their benchmarks. i say they're going to stick with it to the end, especially if they want to get bonuses. >> what is the s&p target you just laid out? does that involve the retail investor? does that argument imply they have increased exposure to equities? >> last week, our research department's investment policy committee raised 12-month target for the s&p to 1895. now you might think that that's overly bullish target but that's really only 7% above where we are right now, which is you could say is a little bit less than what we have seen over the past many years since world war ii. i call myself a bull with a lower case b. >> where do you sit, scott? >> our target for this year, we have been at 1650 to 1700.

i argue the market's ahead of ourselves. but our year-en2014 target range for the s&ps, 1850 to 1900. we are bullish, not wildly bullish. but i want to make a comment on the retail investor. wells fargo advisers, that's who pays the bills here, retail investors. we've been pounding the table trying to get our clients to get cash off the sideline, it's been a real struggle. while more retail investors are coming into market, i don't think it's anywhere near a contrarian indicator kind of level. and i can say from our clients, they still have a lot of cash on the books. we haven't seen the kind of flows come yet that could potentially come, but i -- we're far from a contrarian indicator on retail flows, i think. >> is it in strict cash, scott? where else are they if not

equities or bonds? in well, carl, i tell you, we -- our clients tend to be overweight bonds here and longer duration actually, too. we're trying to talk to them about that for quite a while. trying to work on that for quite a while. our clients hold a lot of cash in their accounts. so they have bond allocations but a lot of cash. >> it's interesting, as well, because so much of this goes back to confidence in the equity markets not just at prices but the structure generally. what changes that? still talking about structural improvements that have to be made to the comments about where the new york stock exchange is headed for here or the ipos are starting to pick up here, continue to go over well? does that help inspire confidence? >> i think ipos go over well, more m&a activity the implication is that you have the smart money out there willing to put their money to work, either in the form of new companies or acquiring other companies because of what their outlook is

for the economy in the quarters ahead. i think also, investors need to feel more confident stocks are not overvalued. our belief is they are not. while valuations are still appealing, they're certainly not as compelling as they were many quarters ago. >> sure. reminds of warren buffett's comments. we'll keep an eye on the price targets as we head into 2014. >> thank you. >> not good news for the windy city. fitch downgrading chicago's credit rating not one, not two, but three levels because of the city's growing, unfunded pension liability. is chicago on its way to becoming the next detroit? we've got answers, after the break.

welcome back to "squawk on the street." breaking news regarding carl icahn. waiting for mr. icahn to speak again with tim cook, apple ceo. that has happened. carl telling me a short time ago that he has spoken with tim cook again over the last few days. that they had a good conversation and they continue to study the buy-back situation. also saying that we both continue to believe the company's undervalued we, being carl icahn and tim cook. apple's stock trade down 1%. coming off levels a bit but sitting at 518 a share. the headline here, carl icahn

and tim cook have spoken again, described by mr. icahn as being a good conversation. they continue to study the buy-back situation. we look at apple shares and follow that one. the other story, victory of carl icahn in his battle with transocean. take a look at what those shares are doing today. that of course is rig. mr. icahn adding one person to the board and re-electing the company as someone that he did support. mr. icahn has been arguing for a bigger dividend to be paid. they're raising the dividend to $3, that's from $2.24. perhaps not as much as mr. icahn would have liked but at least it's a step in the right direction. he says they will ipo and mlp and make $800 million in cost cuts. mr. icahn telling me, this move by transocean is in his words a great step in the right direction. he congratulates the board acting responsibly, shows the

activist model continuing to work well and with the mlp spin-off and cost cutting under way, he hopes to raise the dividend even further down the line. that is news on a couple of fronts, karl, from carl icahn. >> scott, thank you very much for the update. scott wapner at headquarters. fitch ratings agency downgraded chicago three notches. a pension crisis that makes detroit's look like a walk in the park. scott cohns with details. >> detroit's unfunded pension liability $3.5 billion. chicago's nearly $27 billion. there's no real plan in chicago to get out of the crisis, hence the downgrade by pitch of 8.5 billion in debt, reflects lack of meaningful solution to near and long-term burden. city unsuccessful in attempts to negotiate a solution with labor

unions and lobby the state legislature. mare emmanuel calling for mention reform. >> we cannot allow the future to become a stark choice between a pension payment or police officer. a pension payment or school principal. >> the ground grade comes after a day after a $100 billion statewide. in chicago the six pension funds have only half of the funding they need. teachers union points out the city's been putting off required contribution to the pensions for years of $400 million payment to the teachers fund due in june. chicago's pension crisis is extreme but not unique. i'll be crossing the country to show you the crisis in america's cities. it's not just pensions. five cities, five issues, five days. our series "critical

condition:save america's city" right here on "squawk on the street." >> huge issue in chicago, putting it into focus. look at social media, vine, instagram or others, video's the next major frontier. the squawk breakthrough all about video. a social media platform that lets you watch web content and interact with people while doing it. we'll show you how they're doing it when "squawk on the street" returns.

quick update on the ali baba story. this year, totalling $5.7 billion. that's up from $3.1 billion last year. in comparison, last year, total cybermonday, black friday sales $2.5 billion in this country. yahoo! which owns a stake in allali ba baba, jon fortt's here on set here. >> that's just a mind boggling number, if you just imagine, it's like all of our christmas, hanukkah, everything wrapped into one over there. so many people, it makes you wonder how far they can run. implications for yahoo! imimportant, own a big stake and they're milking it. >> scott wapner brought us the news, conversation between icahn and apple's tim cook on the same page about the stock being

undervalued. how much does that move the needle, if at all? >> not much, i don't think. tim cook is great at diplomacy. he'll talk to anybody, even me on the street. >> as he has. >> on this program. and i mean, i don't know how realistic it is, $150 billion debt on apple's part do that. he's running the same dell play book on apple but apple's got more options. we'll see. >> two big stories to watch today. between skype and google hangouts, vine, instagram you, could say video's social media's next big frontier. last year we introduce dwrod yo spree cast. it has launched a mobile app, broke out of beta with new features. jeff joins us here, ceo of spree cast. great to have you you back. >> thanks for having me. >> why did it take so long to

come out of beta? from a few things we wanted to get done before we came out of beta. one we wanted to get the mobile app out two introduce moneytization features and redesign the site. >> you've been active up to this point, right? we've talked about the high-profile get-togethers with likes of anderson cooper. what is the road map? >> two areas that we're most know on focused on vh1 mtv, using spree cast to engage audience about conversation, sports, media, journalism, politics. we've got big media properties. also a lot of longer tail bloggers, trying to engage the audience. second piece is educational content, not so much traditional education but how-to content,

teaching others about photography, crafts or other spiritual matters. that's where spreecraft is focussed evidence. >> what you're doing remind me of youstream which has underperformed expectations. where did they go wrong? what are you doing that's going to do better? >> that's a good question. youstream is a single stream focus live streaming platform, a single stream that many people can watch live. spreecast differentiates, we're about conversation where you can bring multiple streams into the conversation, anybody in the audience can request to join on camera, be part of the conversation as opposed to watching a single live event. >> what's an example of the most successful way that spreecast has been used? >> if you look at take espn as an example, go on to espn's website, you can find their journalists talking about some live sports event. using our player, right embedded

on the site, the audience can interact and join that conversation. whether it's an example like that, that espn is doing or cnn and anderson coop, engaging the audience and the news, this is an example. >> what is it about that interactivity that makes it more val able? are they more likely to click on an ad? >> we know from the last six or eight years people like to connect online, right? you know that from social media, facebook, twitter, other platforms. you can see when people watch the news or live sporting events they're sharing on facebook, twitter. we're trying to bring the desire that consumers have to interact and real-time into the platform directly. we flow that that interactivity is valuable to consumers. >> good to see you. keep our eye on you guys. come back more often. >> thanks for having me. shares of tesla motors on the rebound. we'll tell you why after a short break.

dow's up 21. take a look at tesla. intraday activity today on tsla, up $4.42. that's a 3% gain. back above 140, it's the second

biggest gainer on the nasdaq 100 behind sears. stock is rebounding with concerns about the car fires died down over the weekend. the owner of the latest model s to erupt in flames says he would buy another in a heartbeat. given the severity of the accident the car saved his life. we are keeping a close eye. we know it's a volatile stock, multiples weigh up there. it's a cult stock, as cramer would call. it's been through a couple of rough weeks. >> sure. >> random downgrade here or there from a sell side analyst. one to watch. gets people's attention. >> a day on the nasd aganasdaq red. on friday art was saying it seemed thursday it was the bears in control, friday was the bulls and today it's a draw. >> that's right. back to headquarters. wapner, just spoken to icahn. time for the "halftime".

>> thanks so much. what we're following today ahead of the curve everybody what apple is reported to have up its sleeve what it means for the stock and the latest conversation between icahn and cook as well. technical trouble. reality check on what the charts are really saying about where the markets could go next. we begin with a big call on some of the market's biggest movers. morgan stanley saying internet stocks from google to groupon have gotten too pricely. it still likes most of the names the group has gone too far, too fast. it's halftime. pete, you first, time to fail on some of the internet names?